CAL Funding III Ltd. $250.000 Million Notes Series 2018-1 Assigned Preliminary Ratings
OVERVIEW
- CAL Funding III Ltd.'s series 2018-1 issuance is a container securitization backed by a $573,240,354.08 NBV portfolio containing 170,104 containers. CAL Funding III Ltd. has the right to net operating income from the portfolio and any net residual cash flows from the sale of containers.
- We assigned our preliminary ratings to the class A and B notes.
- The preliminary ratings reflect our view of the transaction's structure, portfolio characteristics, and the manager's experience, among other factors.
NEW YORK (S&P Global Ratings) Feb. 16, 2018--S&P Global Ratings today assigned its preliminary ratings to CAL Funding III Ltd.'s $250.00 million fixed-rate asset-backed notes series 2018-1 (see list). The note issuance is a container securitization backed by a $573,240,354.08 NBV portfolio containing 170,104 containers. CAL Funding III Ltd. has the right to net operating income from the portfolio and any net residual cash flows from the sale of containers. The preliminary ratings are based on information as of Feb. 16, 2018. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect:
- Our view of the portfolio characteristics, including the asset quality and lease terms;
- The initial and future lessees' estimated credit quality;
- The payment structures and waterfall mechanism;
- Our analysis of the projected cash flows supporting the series 2018-1 notes' timely interest payment and ultimate principal payment on or before the legal final maturity date;
- Certain compliance tests and early amortization events included in the transaction documents, as described below;
- The presence of a reserve account that covers the series 2018-1 notes' nine months of interest; and
- The manager's experience in managing the container portfolio.
RELATED CRITERIA
- Legal Criteria: Structured Finance: Asset Isolation And Special-Purpose Entity Methodology, March 29, 2017
- Criteria - Structured Finance - General: Ratings Above The Sovereign - Structured Finance: Methodology And Assumptions, Aug. 8, 2016
- Criteria - Structured Finance - ABS: Global Container Lease-Backed ABS Methodology And Assumptions, June 5, 2015
- General Criteria: Global Investment Criteria For Temporary Investments In Transaction Accounts, May 31, 2012
RELATED RESEARCH
- Presale: CAL Funding III Ltd. (Series 2018-1), Feb. 16, 2018
- 2017 Lease Rate Assumptions For Rating Container Lease-Backed ABS Transactions, Jan. 20, 2017
- Global Structured Finance Scenario And Sensitivity Analysis 2016: The Effects Of The Top Five Macroeconomic Factors, Dec. 16, 2016
- Marine Shipping Container Transactions Are Holding Steady In A Challenging Pricing Environment, May 31, 2016
- Credit Rating Model: Container Assumptions Analyzer, Sept. 8, 2015
In addition to the criteria specific to this type of security (listed above), the following criteria articles, which are generally applicable to all ratings, may have affected this rating action: "Post-Default Ratings Methodology: When Does Standard & Poor's Raise A Rating From 'D' Or 'SD'?," March 23, 2015; "Global Framework For Assessing Operational Risk In Structured Finance Transactions," Oct. 9, 2014; "Methodology: Timeliness of Payments: Grace Periods, Guarantees, And Use of 'D' And 'SD' Ratings," Oct. 24, 2013; " Counterparty Risk Framework Methodology And Assumptions," June 25, 2013; " Criteria For Assigning 'CCC+', 'CCC', 'CCC-', And 'CC' Ratings," Oct. 1, 2012; "Methodology: Credit Stability Criteria," May 3, 2010; and "Use of CreditWatch And Outlooks," Sept. 14, 2009. PRELIMINARY RATINGS ASSIGNED CAL Funding III Ltd. (Series 2018-1) Class Rating Amount (mil. $) A A (sf) 238.000 B BBB (sf) 12.000
Primary Credit Analysts: | Steven Margetis, New York (1) 212-438-8091; steven.margetis@spglobal.com |
Jie Liang, CFA, New York (1) 212-438-8654; jie.liang@spglobal.com | |
Secondary Contacts: | Kate R Scanlin, New York (1) 212-438-2002; kate.scanlin@spglobal.com |
Jing Xie, CFA, New York (1) 212-438-7101; jing.xie@spglobal.com | |
Research Assistant: | Matthew S Gardener, New York |
Corporate & Government Credit Analyst: | Betsy R Snyder, CFA, New York (1) 212-438-7811; betsy.snyder@spglobal.com |
Grant Hofmeister, New York (1) 212-438-8855; Grant.Hofmeister@spglobal.com |
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